NEW YORK (AP) - Apple Inc. said Friday that it was "stunned" to find that its iPhones have for years been using a "totally wrong" formula to determine how many bars of signal strength they are getting.

Apple said that's the reason behind widespread complaints from users that the latest model, iPhone 4, can show a sudden plunge in signal strength when they hold it in a way that covers a small black strip on one edge of the phone. Users online have jokingly called this the "death grip" for the phone.

That drop seems exaggerated because the phone can wrongly display four or five bars of signal strength when it shouldn't, Apple said.

"Their big drop in bars is because their high bars were never real in the first place," the company said in a letter to users.

Apple launched the iPhone 4 on June 24 in the U.S. and four other countries.

Some outside engineers and users have blamed the iPhone 4's apparent reception problems on the novel design that incorporates its antenna into the case. But the company said that any phone will show reduced reception if held in a way that covers the antenna, usually mounted at the rear and bottom of a phone. It maintains that iPhone 4's wireless performance is better than previous models. And it said the incorrect signal-strength formula existed in the original iPhone, launched in 2007.

Apple, which is based in Cupertino, Calif., said it will fix its signal strength formula to conform to other AT&T phones through a free software update for iPhone models 3G, 3Gs and 4 within a few weeks.

"We are also making bars 1, 2 and 3 a bit taller so they will be easier to see," Apple said.

Despite recurring complaints about dropped calls and slow data service, particularly in the U.S., the iPhone is a standout success, with each model selling faster than the previous one. Apple said it sold 1.7 million iPhone 4s in its first three days, essentially running out of stock.

AT&T Inc., the exclusive iPhone carrier in the U.S., has faced much of the users' blame for dropped calls and poor wireless performance. Apple apologized to customers Friday "for any anxiety we may have caused.